Britain enacts sweeping Online Safety Bill, a federal judge halts a California internet privacy law, and more…
IN THE NEWS
- Britain enacted the Online Safety Bill, a comprehensive law that introduces age-verification requirements for pornography sites and establishes other rules to regulate online content. The legislation, which took over five years to develop, forces companies to screen for inappropriate content proactively instead of reacting to alerts of illicit content. Michelle Donelan, the British secretary of technology, called the Online Safety Bill “a game-changing piece of legislation.” Critics, including free speech advocates, claim that the bill threatens freedom of expression.
- A federal judge halted the implementation of AB 2273, a California law aimed at protecting the privacy of minors by limiting businesses’ use of data collected from young internet users. U.S. District Judge Beth Labson Freeman granted a preliminary injunction, writing in her opinion that “the State has no right to enforce obligations that would essentially press private companies into service as government censors.” Proponents of the law praised the decision for preventing regulators from violating free speech and online privacy rights, while Attorney General Rob Bonta’s office expressed disappointment in the decision.
- The U.S. Department of Homeland Security (DHS) proposed a new rule designed to enhance the protection of temporary workers in the H-2A and H-2B visa programs. The H-2A and H-2B programs allow U.S. employers to hire foreign nationals for temporary roles when there is a shortage of qualified and available American workers. The introduced reforms offer more flexible safeguards for participating workers, such as extended grace periods that allow visa holders to stay in the United States while seeking new employment or pursuing a change in immigration status.
- The U.S. Department of Homeland Security (DHS) announced the creation of the Homeland Intelligence Experts Group, a panel of private sector experts formed to advise DHS on intelligence and counterterrorism efforts. DHS established the Experts Group to respond to various threats, such as domestic violent extremists and cyber criminals. The group of journalists, civil liberties advocates, and intelligence officials will convene four times annually. It will include both a former Director of National Intelligence and the Executive Director of the Human Rights Institute at the Georgetown University Law Center.
- The U.S. Food and Drug Administration issued draft guidance to supplement and expand existing guidance on how confirmatory evidence can be used in clinical trials. The new draft guidance provides additional information on the flexibility in the amount and type of evidence needed to establish the effectiveness of clinical trials. The agency stated that it issued the guidance because the science behind drug and biological development has evolved, which has led to changes in the types of product development programs submitted to the agency for evaluation.
- The Consumer Financial Protection Bureau issued guidance requiring lenders who use artificial intelligence in reviewing loan applications to explain their reason for denying consumers credit. The agency explained that the guidance is designed to improve consumers’ chances of obtaining future credit and to protect consumers from illegal discrimination. The agency also structured the guidance to prevent lenders from relying on a finite checklist of reasons provided in sample forms that may not include the real reason for denial. Consumer Financial Protection Bureau Director Rohit Chopra stated that creditors should be able to explain the reasoning for an adverse decision and that there “is no special exemption for artificial intelligence.”
- The Federal Trade Commission and the U.S. Department of Labor signed a Memorandum of Understanding outlining how the two agencies will cooperate to protect workers from anticompetitive, unfair, and deceptive practices. The agreement focuses on areas of mutual interest for the agencies, including the impact of labor market concentration and the imposition of one-sided and restrictive contract provisions, such as non-compete clauses. The Federal Trade Commission explained that the agreement is part of its broader initiative to use the agency’s full authority to protect workers, including through enforcement actions and rulemaking.
- The U.S. Department of the Interior announced a plan to preserve over 4,000 acres of land within New Mexico’s Placitas region. The proposal’s primary focus, the subject of several prior failed legislative attempts, is safeguarding prehistoric archaeological sites. The plan would do so by preventing new mining claims and any development of oil and gas activities in the area for 50 years. The proposal is also designed to protect Tribal lands, enhance local recreation opportunities, and conserve wildlife habitats.
WHAT WE’RE READING THIS WEEK
- In a forthcoming article in the Penn State Law Review, Eric Hess, Managing Counsel of Hess Legal Counsel LLC, argued that regulators and stakeholders should consider using a collaborative approach to regulating decentralized finance in place of a top-down approach. Hess highlighted use cases for decentralized finance such as performing innovative anti-money laundering verifications and evaluating potential adaptations of current Securities and Exchange Commission and Commodity Futures Trading Commission rules. He explained that this collaborative method can strike a balance between regulation, risk management, and innovation, benefiting the entire decentralized finance ecosystem.
- A recent Consumer Financial Protection Bureau (CFPB) report highlighted the risks students face when enrolling in tuition payment plans offered by colleges. After examining nearly 450 institutions, the CFPB discovered inconsistent disclosures and confusing repayment terms that put students at risk of missing payments and accumulating more debt. The report identified high fees, coercive debt collection, compounding interest, and inconsistent disclosures as threats to students’ finances that are often unexpected. The CFPB plans to continue monitoring tuition repayment plans for potential violations of consumer financial laws.
- In a forthcoming research paper, Aaron L. Nielson, Professor of Law at Brigham Young University Law School, Christopher J. Walker, Professor of Law at the University of Michigan Law School, and Melissa F. Wasserman, Professor of Law and Associate Dean for Research at the University of Texas at Austin School of Law, discussed the legitimacy of agency adjudicators and adjudications. The authors noted proposals to improve the legitimacy of adjudications, including by creating a new “central panel” agency to house agency adjudicators. The authors argued that these proposals are misguided and that Congress and federal agencies should use the Constitution to promote the independence of adjudicators, including by limiting political interference in the hiring, supervision, and firing of agency adjudicators.
- In an essay in The Regulatory Review, Susan Block-Lieb, the Cooper Family Chair of Urban Legal Issues at Fordham Law School, argued against criticism that the Consumer Financial Protection Bureau lacks accountability due to its regulatory and financial independence and single-director leadership. Block-Lieb contended that Congress intentionally designed the Consumer Financial Bureau’s design to shield the agency from undue influence by interest groups and executive interference. The agency, Block-Lieb emphasized, still cooperates with other regulatory bodies and responds to political and industry forces.